Company that said it would renovate west Orlando apartments files for bankruptcy

A company that just last month touted an ambitious plan to renovate hundreds of rundown apartments in west Orlando has run into a few snags: bankruptcy, foreclosure and $1.4 million in code-enforcement fines.

A company official downplayed the seriousness of the financial troubles and insisted the renovation — at an estimated $40 million — will still happen.

"All I can tell you is my plans are in place. If the court approves the plan, I believe we can still do it. We're going forward with the [bankruptcy] reorganization, and that's all I can say for now," said Jim Yuken, who controls the company with his father, Salomon Yuken.

But as the problems mount, the long-awaited face-lift for the Washington Shores area could be further away than ever.

"These guys are the worst," said City Commissioner Daisy Lynum, who represents the middle-class neighborhoods around the decaying apartments. "They have absolutely no credibility with the city. The community has suffered because of these owners' neglect of these properties."

PDQ Coolidge Formad LLC and a sister company own hundreds of apartments in Orlando, including 424 units spread over 22 acres along Orange Center Boulevard. It was 2007 when the Miami-based company bought the five crumbling complexes — Washington Shores Village, Orange Manor, Colonial Manor, Lakeview Manor and Bunche Manor — with the hope of renovating them.

But records show that on April 4, the companies filed for Chapter 11 protection at the U.S. Bankruptcy Court in South Florida, seeking a court-supervised reorganization. The filing lists 29 creditors, including various service companies and suppliers, as well as the Internal Revenue Service, the Orange County Tax Collector and the Orlando Utilities Commission.

By that time, federal government-sponsored Fannie Mae had already filed to foreclose on the mortgages of seven of the companies' properties in Orlando.

Jim Yuken said the problems stem from changes to the companies' ownership.

Last year, the Yukens sold the companies to a Miami-based nonprofit corporation called the Education Empowerment Foundation, though no money changed hands and the Yukens retain management control of the apartment properties, according to Yuken. Transferring ownership to a nonprofit would make it easier to obtain financing and grants to pay for the renovations, he said.

But Fannie Mae won't recognize the transfer. By filing bankruptcy, the Yukens hope to force the mortgage-holder to negotiate better terms.

"They forced us into Chapter 11," he said. "I'm not going to let Fannie Mae push me around and take these properties away, because I've made a big investment."

Meanwhile, the apartments along Orange Center Boulevard remain among the worst in Orlando. City inspectors say the owners have neglected the aging buildings and failed to repair serious code violations.

In February, company representatives came before the Code Enforcement Board to answer for a long list of violations, including crumbling stairwells, exposed wiring, broken windows, plumbing and roof leaks, mold and vacant units left unsecured.

The city gave the owner until April 8 to repair the major violations that are considered a threat to tenants' safety or face fines of $100 per day for each violation. City officials said the company already had some outstanding fines, and though the deadline has passed, many of the new violations still haven't been fixed either.

The company has 51 separate code-enforcement cases, and 29 of them remain open and unresolved. The company owed the city $1.4 million in fines as of Friday, an amount that increases by $2,900 a day.

"The city understands the potential implications this bankruptcy could have to the surrounding community and neighborhoods, and we will be working to mitigate those possible consequences," city spokeswoman Cassandra Lafser said.

Chief among those possible consequences is the demise of the renovation plans and the continued decay of the apartments in Washington Shores.

The renovation depends on obtaining financing through state and federal programs meant to encourage improvements to low-income housing. In February, company officials told the Code Enforcement Board they were on the cusp of obtaining that financing and that construction would start as soon as October.

But it's not clear whether the company has yet applied for financing, or how the bankruptcy, foreclosures and fines would impact the eligibility for it.

Commissioner Sam Ings, who has received campaign contributions from the Yukens and their companies, said the apartment owners have a plan to move forward.

"I hope they get past this so we can get rid of the blight in that neighborhood," Ings said.